After nearly three years of sputtering and false starts since the pandemic-era highs, dealmaking is finally looking like it’s back in gear on Wall Street.
Goldman Sachs, JPMorgan, and Morgan Stanley all reported blockbuster third-quarter earnings this week, as CEOs revived mergers and financing plans that had stalled while investors waited for markets to thaw. For the second quarter in a row, signs are mounting that the long-standing dealmaking drought — which has affected bankers’ pay and morale — is showing real signs of easing.
“Whether we are entering a golden age of investment banking remains to be seen, but it has been several years of chatter around green shoots, and now the flywheel is taking hold,” Morgan Stanley CEO Ted Pick told analysts in a call on Wednesday.
The firm reported investment banking revenue of $2.1 billion — up 44% year-over-year — buoyed by an 80% surge in equity underwriting to $652 million, as well as rising advisory fees of $684 million, up 25%.
Goldman Sachs led the rebound Tuesday, announcing its third-highest quarterly net revenues ever: more than $15 billion, the bank said in its quarterly earnings release. David Solomon, the firm’s CEO, told investors in a shareholder call that mergers were back — propelling the firm’s advisory revenues 60% higher than the same period one year earlier, to a quarterly total of $1.4 billion.
“The setup remains constructive,” he said Tuesday, praising a “more supportive regulatory environment” for spurring renewed activity.
Other firms that reported their numbers this week, from JPMorgan Chase to Bank of America, were also enjoying the dealmaking high, reporting double-digit fee jumps.
Putting the cart before the horse?
Stocks of large-cap banks were up late Wednesday morning, with Bank of America up by more than 5%, Morgan Stanley rallying by 6%, and JPMorgan gaining 2%.
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To be sure, Wall Street knows how it feels to spot rays of optimism, only to see them eclipsed by clouds of uncertainty that disrupt the levers of corporate transacting.
“The world is in an uncertain place, and there could be pauses depending on how geopolitics feel, but generally speaking, the investment banking product category over the next couple of years should be up and to the right,” Morgan Stanley’s Pick predicted.
Jeremy Barnum, JPMorgan’s finance chief, warned in a separate earnings call that Wall Street shouldn’t get too comfortable — prospects can change on a dime.
“As you well know,” Barnum said, “that could change overnight.”
For example, if the government shutdown continues, it could postpone capital markets and public issuance activity, potentially hurting the ECM bankers who take companies public.
Strong quarters at BofA, JPMorgan, Citi
The volume of deals worth $5 billion or more surged 64% from last year, reaching 100 so far in 2025, up from 61 by this point in 2024, according to LSEG data from September.
Over the last few months, banks have advised on the public offerings of Klarna, Figma, and Coreweave. There have also been announcements of mega-deals like the proposed $50 billion Anglo American and Teck Resources merger and Electronic Arts’ $55 billion take-private, whose fees are not yet included in the bank’s results.
At Bank of America, third-quarter investment banking fees reached $2 billion, up 43% compared with last year. More economic certainty around trade, tariffs, and taxes has lifted dealmaking, encouraging clients to make longer-term decisions, chief financial officer Alastair Borthwick said. He said the firm’s dealmaking pipeline was up double digits in the third quarter.
JPMorgan’s investment banking fees rose 16%. Commercial and investment banking net revenues reached nearly $20 billion for the quarter, with CEO Jamie Dimon saying, “ECM and M&A activity picked up against a supportive backdrop.”
“The quarter showcased the strength of JPMorgan’s diversified business model, with all major segments contributing to growth,” said Kenneth Leon, director of equity research at CFRA Research. “We think this will lead the momentum for the rest of 2025 and into 2026.”
JPMorgan CFO Barnum told shareholders Tuesday that the rebound in lending is “mirroring the pickup in deal activity across our investment-banking businesses,” highlighting how client borrowing and transaction volumes are moving in tandem again. “We’re starting to see more M&A activity,” he added, citing “the busiest summer we’ve had in a long time.”
The bank said trading and client activity were contributing to a better dealmaking landscape, and executives cited higher compensation and “growth in front office employees” — a reversal from the firm’s position earlier this year, when Barnum said leadership had told managers to “resist hiring” and try to do more with less.
Citi’s investment bank generated more than $1.1 billion in fees, a 17% increase from the previous year. Corporate lending revenue was up nearly 40% as clients tapped its balance sheet again.
The investment banking unit has experienced a surge of ambition driven by its new IB chief, Viswas Raghavan, a former JPMorgan dealmaker who joined Citi last year as executive vice chair and head of banking under CEO Jane Fraser.
